There’s gold in that water

A gold mining company will lease some of Pueblo’s raw water for the next decade at a record price.

The Pueblo Board of Water Works Tuesday approved a 10-year lease of 400 acre-feet of water to the Cripple Creek & Victor Gold Mining Co. in Teller County.

The water will lease for $630.63 per acre-foot (an acre-foot is 325,851 gallons) initially, and will be adjusted annually by the same percentage as Pueblo water rates.

That will mean more than $250,000 in revenue for the water board this year.

“The 400 acre-feet is a relatively small amount,” said Alan Ward, water resources manager. “If we commit too much water, we lose our flexibility for operating during times of drought.”

That amount also should not interfere with the water board’s other multiyear leases.

The price represents 1.5 times the price of the Comanche power plant lease, reflecting the water board’s policy of charging a 50 percent premium to customers outside city limits, Ward said.

Cripple Creek & Victor plans to use the water to augment its supplies and replace depletions to local waterways.

The water will be delivered to either the mouth of Fourmile Creek or Beaver Creek, or to the town of Victor’s account in Lake Pueblo. From there, it will be the gold mining company’s responsibility to exchange it upstream to operations located about 25 miles from the Arkansas River.

Revenue from the lease will be used to offset Pueblo water rates in the water board’s $34 million budget.

Metered water sales are expected to generate $23.3 million this year, while leases of water will contribute more than $8.2 million.